from the urls-we-dig-up dept

If there were some simple things you could do that would make you smarter, you'd do them, right? Unfortunately, it's difficult to guarantee that a particular activity will actually cause you to be smarter. If you'll settle for a nice correlation, though, there are plenty of things to try! Here are just a few.

from the good-to-see dept

For many years we've vocally criticized a very questionable line of arguments made by various lobbyists and (tragically) the US Commerce Department, that if you look at so-called "IP intensive industries" and see that those industries employ lots of people and are often profitable, it therefore means that stronger copyright, patent and trademark laws are good for the economy. There are all sorts of problems with this argument, highlighted simply by the fact that the single largest employment listed in one of these studies for an "IP intensive" industry is grocery stores. It's somewhat comical to believe that grocery stores employ 2.5 million people because of trademark law.

When challenged on this, the US Commerce Department's incredibly weak defense of this kind of argument (i.e., "Steve Jobs had patents, Steve Jobs made cool things, ergo, patents are important to innovation") was certainly troubling.

Thankfully, a new report by Eli Dourado and Ian Robinson at the Mercatus Center at George Mason University does a nice job dismantling most of the claims in these series of reports that suggest that lots of jobs in "IP intensive industries" automatically means "strong intellectual property laws are good." The report starts out by simply highlighting the problem of generally using "jobs" as a proxy for "good for society." That's a fallacy, and often a problematic one for innovation (where disruption may initially destroy a bunch of jobs, but, in the long-term, create many new opportunities).

Perhaps most fundamentally, jobs are not ends in themselves, and counting the number of jobs created is therefore not the best way to evaluate a policy. As Bryan Caplan notes, “Economists have been at war with make-work bias for centuries. [19th-century French economist Frederic] Bastiat ridicules the equation of prosperity with jobs as ‘Sisyphism,’ after the mythological fully employed Greek who was eternally condemned to roll a boulder up a hill.” Economic progress, Bastiat says, is defined by an increasing ratio of output to effort—indeed, economic nirvana is achieved when there is high output and zero labor effort.

Lawmakers could create jobs by requiring that construction projects be performed with spoons instead of shovels or tractors. Such a policy, however, would reduce worker productivity and decrease total economic output. Consequently, this spoon mandate would not promote economic progress.

Likewise, some of the jobs created by IP may harm the economy instead of helping it. Suppose IP laws necessitated that every firm hire 10 additional IP lawyers, but otherwise left output unchanged. IP could be said to create millions of additional jobs, but these would be jobs that reduced real output per worker, jobs that moved society further away from economic nirvana. They should be reckoned as economic costs of IP, not economic benefits. If (counterfactually) this were the only effect of IP, then abolition of IP would mean that the effort of the heretofore unproductively employed IP lawyers could be redirected to more productive uses.

But of course, the bigger issue, as we've outlined, is the silly argument that these jobs exist because of strict intellectual property laws. Not a single one of these studies has looked at how the jobs change with changes in the law. It simply is ridiculous to naturally assume that most of these jobs (like the grocery store point above) exist because of the current laws.

As a reductio ad absurdum, consider the blogging “industry.” As a matter of law, all authors are automatically, without registration or any other formal notice, bestowed with a copyright in their blog posts. Since the entire output of the blogosphere is copyrighted, under IPUSE’s methodology it would qualify as an IP-intensive industry (if it were considered an industry). Nevertheless, it seems clear that copyright protection accounts for at best a tiny sliver of bloggers’ output—the vast majority of blogs are accessible without a paid subscription, and many bloggers do not attempt to monetize their posts (with ads, say) at all.

If some industries resemble blogging—for example, if copyrights are automatically awarded but not relied on, or if patenting is done for primarily defensive purposes, or if trademarks exist but are rarely relied on by consumers—then IPUSE and the other reports that rely on simplistic counts of IP grossly overstate the number of jobs due to intellectual property. For these industries, IP intensity is not a reliable indicator of IP dependence.

On a similar note, for years we've pointed to CCIA's reports that did such a great job highlighting this fallacy by using the identical methodology to define "fair use intensive industries" to show that based on the copyright industry's own bogus methodology, clearly fair use is "more important" than copyright since it employs more people -- and thus, if we were to believe the original reports, then we should clearly expand fair use (massively, since it's so limited today). The whole point of the report was to mock the silly claims about "copyright intensive industries" -- and, amazingly, those who supported one report were horrified by the fair use report, attacking the methodology, without the self-awareness to recognize they were mocking their own preferred methodology.

As the report also notes, many of these other reports on how "important" IP is assume that intellectual property is the sole incentive for these jobs and related innovations and progress. That's just silly. As the new report notes, there are lots of possible impacts that these studies don't even remotely account for:

As a general matter, intellectual property law can overprotect as well as underprotect. When it overprotects, it creates jobs without a corresponding increase in real output, it creates jobs by destroying other jobs that are not accounted for, and at the margin it accounts for very little of the actual output created by supposedly IP-intensive industries.

The report then goes on to explore each of the three key areas -- copyrights, patents and trademarks -- to show why the assumptions underlying many of the reports simply don't hold up under scrutiny. It's a useful addition to counteract the bogus studies that make the bogus correlation argument based on the broadly defined "IP-intensive industries." If I have one complaint about it, it's that the report doesn't go as far as I expected, based on the title: "How Many Jobs Does Intellectual Property Create?" When I started reading the paper, I expected an attempt to actually look for some sort of causal methodology to determine such a figure, rather than just a dismantling of the arguments of those other reports. It's still a useful bit of research and analysis, but the title overpromises a bit.

from the urls-we-dig-up dept

Lots of people say they'd like to live longer. So longevity has been studied extensively, and a vast number of correlations have been found. The list literally goes on and on and on. This doesn't mean anyone has discovered the cure for death, and these correlations often have no causation logic behind them whatsoever. Drink a glass of wine every day, eat no meat, restrict your calories drastically, and read some of these other correlations.

from the urls-we-dig-up dept

Big data is a term that's been getting some buzz as the next thing that's going to change everyone's lives (for better or worse, depending on how you look at it). Having a lot of data doesn't necessarily mean you also have a lot of useful knowledge. Garbage in, garbage out, so they say. And making correlations is easy compared to finding a direct causal relationship. However, that hasn't stopped (so-called) journalists from writing misleading headlines. If you hate correlations being mistaken for causation, submit examples you've seen in the comments below. Here are just a few to start off.

from the urls-we-dig-up dept

We've pointed out dietary studies before that suggest calories from different foods aren't the same and that when you eat could be as important as what you eat. But how about focusing just on one meal: breakfast. Should you eat a big breakfast? Is it bad to skip breakfast? Here are just some partial answers.

from the urls-we-dig-up dept

Parents apparently have no idea how to raise children. Parenting is tough, but no worries, there's always the unsolicited advice from family and strangers about what they think is best for children, and there are tons of parenting books available that may or may not help. There's also no shortage of contradictory studies out there that just leave parents utterly confused. Here are just a few recent findings on what's supposedly good or bad for kids. Remember correlation isn't causation, etc, etc.

from the don't-go-there dept

This is unfortunate. Despite plenty of research showing that patents do not, in fact, lead to increased innovation (but rather increased patenting), many still assume that there's a direct linkage. Of course, it is true that many successful industries see high rates of patents, but there is evidence that patents tend to lag the actual innovation, rather than predate it. That is, once an area or industry is innovative and successful then everyone rushes in to get patents and try to extract their piece of the pie, often slowing down the pace of innovation.

Metro areas that produce a lot of patents—and the inventiveness that that implies—are more likely to see above-average gains in population, productivity, jobs, and education, according to a report from the Brookings Institution, a nonprofit research and policy think tank. And the bottom fourth of metro areas, the ones that produce the fewest patents, could gain as much as $4,300 per worker over a decade if they amped up their patent production to match the top fourth.

“If we were able to get the roughly 250 metropolitan areas that do very little patenting up to the level of the 100 that do a great deal of patenting, we’d be richer in an extraordinary way,” says Jonathan Rothwell, a lead researcher on the study. “It would make really a huge difference to economic development.”

Since the report focuses on successful metro areas, it seems that there are many, many other factors that may have resulted in the successful economic situations in those areas, and those other factors may also have led to the increase in patenting. Assuming a causal relationship and (worse) suggesting that all other regions need to do is up their patenting, is a dangerously ill-informed suggestion. While the report claims to account for "reverse" causation, it appears to make little to no effort to really account for the many, many variables that are easy to observe in every day life that lead to a correlation between patents and economic output.

I'd been working on a response to some of the many methodological problems I spotted in the report, and it was growing ever longer and longer... and then I saw that Eli Dourado did a much better and more concise job of it in explaining why the report is bogus. Dourado points to two possible explanations for the correlation, neither of which are accounted for by the paper:

These conclusions are unwarranted given the model and findings expressed in the paper. To see that this is the case, assume temporarily that patents do nothing to incentivize real innovation, and that they merely transfer wealth from consumers at large to the patent holder through firm profits. If this were the case, then we would find that measured output per worker was higher in metropolitan areas with more patents—exactly what the authors found!—because they are gaining profits at the expense of consumers in metropolitan areas with fewer patents. In other words, the authors could be laboring under a fallacy of composition. Just because patents enrich the MSAs that generate them doesn’t mean that they are a source of prosperity for the nation as a whole or that they increase social welfare.

Alternatively, assume temporarily that patents do nothing to incentivize real innovation, but that firms that produce valuable innovations must defensively patent them to avoid being taken to court for using their own inventions. If this were the case, then patents would correlate with real innovation, and therefore with output per worker, but they would not cause an increase in productivity. In addition, at least some of the measured increase in output would come from an influx of highly-paid intellectual property attorneys, which by assumption does not represent real added productivity. Note that the top-patenting MSA in the study is Silicon Valley, the part of the country where people are most concerned about defensive patenting. But the word “defensive” does not appear even one time in the report, the appendix, or the working paper.

The authors have done nothing to identify the effect of patents on productivity, which is to say, nothing to rule out either of the possible assumptions above. They are simply relying on the assumption that more patents means more innovation.

This is a major major flaw in the paper. It seems to assume that a whole bunch of things that simply aren't seen by folks who actually work in the industry, and makes little to no attempt to account for those other variables. In the comments, the lead researcher on the paper, Jonathan Rothwell, tries to defend the paper, by saying (in part) that they're just using patents as a proxy on inventiveness, and the paper should not be seen as supporting patents or the patent system itself:

Right up front, I think it is important to keep in mind that our study aimed to examine the effects of invention rather than the effects of patents themselves. Hundreds of economic papers have been written that use patents as a proxy measure of invention (based on detailed firm and industry level analysis), so I think that is fairly uncontroversial.

Just because lots of folks do it, it doesn't mean it's right. But the bigger issue is that while he claims that the paper is not an endorsement of patents specifically or increasingly patenting activity, that's not what he's telling the press. Just look at the quote we have above from what he told the National Journal. He specifically is saying that we should boost patenting in other metropolitan areas, suggesting that it would make "a huge difference to economic development." In other words, contrary to his claims in the blog comments, when talking to the press, he's pretty clear that he believes there's a direct causal relationship between patents and economic development. Furthermore, if he really believed that, he should have disclaimed, publicly, the title of that National Journal article, which explicitly says that patents (not "inventiveness") "matters to economic and job growth."

Also... if the report really is about "inventiveness" and not "patents," perhaps the paper should not have been called "Patenting Prosperity." Just saying.

Brookings, of course, is quite well-established and respected, and you can bet that pro-patent-system folks will be using this report to claim that "more patents are better" and that any reforms that are designed to push back on bad patents or to start limiting the number of patents we issue, would be a bad thing. Even though the report does, in fact, contain some arguments in favor of limiting certain types of patents and patent system abuse, those nuances will undoubtedly be lost. This report is going to get cited repeatedly as "evidence" that we need more patents and stronger patents, despite the fact that the actual evidence says no such thing.

from the like-exactly-the-opposite-of-the-talking-points-no-one-believes-anyway dept

Every time the major players in the copyright industries kick off another push for more legislation, enforcement or protection, they make grandiose claims about how much IP-intensive industries contribute to the economy. "Millions of jobs generating billions in revenue, a small portion of it taxable!" they shout proudly in the direction of the nearest legislator or ICE agent. If IP protection was weakened in the slightest, the nation's entire economy would likely collapse.

IP is innovation, according to these industries. Weak IP laws lead to weak economies. This entertainment industry trope, filled with questionable numbers, is used to justify the endless push for draconian IP enforcement and stiff legal and civil penalties for infringement. But evidence to the contrary continues to mount, punching holes in the IP industries' favorite narrative.

Yesterday, Reuters news service ran an article about a rating of eleven countries based on their enforcement of intellectual property rights. The index was prepared at the behest of the U.S. Chamber of Commerce by a group called The Global Intellectual Property Center, and it ranks the U.S. at the top of the list in terms of strong IP protection (23.73 points on a scale from 0 – 25). But what is interesting is who scored lowest (out of the eleven countries that were ranked). The four “worst” countries for providing the strong IP protection important to the Chamber of Commerce were the four countries known as BRIC — Brazil, India, Russia and China.

So what else do we know about these four nations? In fact, why were they originally grouped together under the acronym BRIC? The answer is that the term was coined because these four countries were the fastest growing emerging economies, showing growth rates between 5 and 9 percent in their gross domestic products (compared with US growth averaging 3.2 over the past 65 years). The source of these averages for the BRIC nations is this report from PriceWaterhouseCoopers, dated February 2012, which contains this conclusion: “We expect the BRIC economies to continue to drive world economic growth in 2012.”

So the four countries driving economic growth are also the four countries with the weakest IP protection regimes, amongst those 11 rated by the Chamber of Commerce report. Doesn’t the conclusion seem simple, that weaker IP enforcement is part of the picture for economic growth?

Now, Smith points out that this connection is nothing more than correlation, but a few conclusions can be drawn. A lack of solid IP protection does not necessarily doom economies to subpar performance and increasing IP protection does not necessarily lead to a robust economic future. IP industries have relied on the credulity of legislators to pass off the "stronger IP enforcement results in more innovation, jobs, etc." argument, usually packaged with the "no copyright protection means no incentive to create" lie that conveniently ignores years and years of creation pre-copyright and thousands of new artists surfacing at a time when piracy is "rampant."

There's tons of evidence that contradicts the rationale driving the "need" for more IP enforcement. Smith goes on to list a few examples of artists thriving with little or no protection, including "Nollywood," Nigeria's film industry, which has exploded over the last 20 years despite truly rampant infringement, and K-pop star Psy, who's looking at $8 million earned without having to rely on the protections of copyright. So, as has been suggested here time and time again, the real "enemy" of innovation and creativity ISN'T piracy, it's the industries themselves.

[I]P protection is, at least a double edged sword. Piracy can reduce revenues, but it also helps to create distribution channels and grow markets. So creative industries seeking to grow in the digital economy need to do more than try, futilely, to eradicate piracy, they need to seek ways to shape their markets and their marketing to exploit the audiences that it can create.

"New business model," anyone? This has been pointed out again and again. Attempting to defeat something that it at least partially beneficial is, at the very least, short-sighted. On a larger scale, battling piracy with enforcement and legislation rather than by increasing options and providing better services is more than short-sighted -- it's dangerously self-destructive. There's very little evidence that enforcement efforts are making any real dent in file sharing -- certainly nothing that would justify the time, money and effort expended.

Smith concludes his post with these thoughts:

So, slippery as such conclusions can be, I feel comfortable with these two assertions. First, creative people and creative industries can thrive without strong IP protections. In fact, if you are continually looking to the government to increase IP enforcement on your behalf, your industry is probably already in bad trouble. Second, it is perfectly possible to over-enforce IP rights to the point where creativity and economic growth are stifled. There is good evidence that the US has passed that point, and the example of the BRIC nations should suggest to us that we need to reverse our course.

At this point, the legacy industries are too firmly entrenched to expect any sort of nimble maneuvering or backtracking on existing IP laws. A suggestion for just such a reversal, briefly posted by the Republican Study Committee, met a swift, ignoble death at the hands of Hollywood's lobbyists, who also pressured its author, Derek Khanna, out of a job. No matter how much evidence contrary to the copyright industries' talking points is presented, the response is always the same: more enforcement, legislation and protection. It will take a severely weakened entertainment industry to give any quarter, but as long as its aims remain self-destructive, that day seems inevitable.

from the urls-we-dig-up dept

In a few days, a lot of chocolate will be eaten by kids (and maybe their parents), and there will also be a lot of discounted candy and chocolate on sale in many grocery stores. Just so that we don't feel too bad about indulging on Halloween treats, here are a few studies that might ease our guilt for a while.

from the correlation-and-causation dept

Over on Dr. Sanjay Gupta's CNN blog, there's a report claiming that excess gaming is linked to depression and bad grades, with the report clearly suggesting that those "addicted" to gaming get depressed and do poorly. It even trots out the old silly argument about making "video game addiction" an official disorder. But, of course, the study is really only showing a correlation between these things, rather than any sort of causal relationship. One could just as plausibly argue that depressed kids choose to deal with or mask their depression by playing more video games. But, I guess headlines that say "depression causes kids to play more video games" isn't as catchy as assuming it's the other way around. Those who have worked with compulsive video gamers have found that there's almost always a separate cause, and treating the problem as "video game addiction," rather than figuring out why the person wants to play so much, tends not to work.